Your eleventh Question, will give an Opportunity of making Some Observations upon a Subject, that is quite misunderstood, in every Part of Europe. I shall answer it with great Pleasure according to the best of my Information,1 and with the utmost Candour.

The Question is.

How great is the present Debt of America? What has she, occasion for yearly, to act defensively? Are those Wants Supplied, by the Inhabitants themselves, or by other Nations? If in the latter case, what does America loose of her Strength by it? Are they not in one manner or other, recompensed, again by some equivalent Advantage? If So, in what manner? What would be required, to act offensively? And by that means shorten the War?

All Europe has a mistaken Apprehension of the present Debt of America. This Debt is of two Sorts, that which is due from the thirteen United States, in Congress assembled: and that which is owing from each of the thirteen States in its Seperate Capacity. I am not able to Say, with Precision, what the Debt of each Seperate State is. But all these added together, fall far short, of the Debt of the United States.

The Debt of the United States consists of three Branches. 1. The Sums which have been lent them, by France and Spain, and by Mr. Beaumarchais and Company. These have been for purchasing some Supplies of Cannon, Arms, Ammunition, and Cloathing, for the Troops, for assisting Prisoners escaped from England, and for some other Purposes. But the whole Sum amounts to no great Thing.

2. The Loan Office Certificates, which are promissory Notes given to Individuals in America who have lent Paper Money to the Congress, and Are their Securities for the Payment of the Principal and Interest.2 These the Congress have equitably3 determined Shall be paid, according to the Value of the Paper Bills in Proportion to Silver, at the Time of their dates.

3. The Paper Bills, which are now in Circulation, or which were in Circulation on the Eighteenth day of March last. These Bills, amounted to the nominal sum of Two hundred Millions of Dollars, but the real Value of them to the Possessors, is estimated at forty for one, amounting to five Millions of Spanish Dollars, or one Million and a quarter Sterling. This is the full Value of them, perhaps more. But this estimation of them has given Satisfaction in America to the Possessors of them, who certainly obtained them in general at a cheaper Rate.

These three Branches of Debt, which are the whole, According to a Calculation made last May, and sent me by a Member of Congress,4 who has been four Years a Member of their Treasury Board and is perfect Master of the subject, amount, in the whole to five Millions sterling, and no more. The national Debt of America, then is five Millions sterling.

In order to judge of the Burthen of this Debt, We may compare it with the Numbers of People. They are three Millions. The national Debt of Great Britain is two hundred Millions. The Number of People in England and Scotland is not more than Six millions. Why should not America, with three Millions of People be able to bear a Debt of one hundred Millions, as Well as Great Britain with six millions of People, a debt of two hundred Millions.

We may compare it, with the Exports of America. In 1774 The Exports of America, were Six millions sterling. In the same Year the Exports of Great Britain were twelve Millions. Why would not the Exports of America, of Six millions, bear a national Debt of one hundred Millions, as well as the twelve millions of British Exports bear a Debt of Two hundred Millions?

We may compare it, in this manner, with the national Debt of France, Spain, the United Provinces, Russia, Sweeden, Denmark, Portugal, and you will find, that it is but small in comparison.

We may compare it, in another Point of View. Great Britain, has already Spent in this War, Sixty Millions sterling—America five Millions. Great Britain has annually added, to her national Debt, more than the whole Amount of her annual Exports. America has not added to hers, in the whole Course of five Years war, a sum equal to one Years Exports.

The Debt of Great Britain is, in a large Proportion of it, due to Foreigners, for which they must annually pay the Interest by sending Cash abroad. A very trifle of the American Debt is yet due to Foreigners.

Lord North borrowed last Year, Twelve Millions, and every future Year of the War, must borrow the Same or a larger Sum. America could carry on this Way, an hundred Years, by borrowing only one Million sterling a year.

The annual Expence of America has not hitherto exceeded one Million a Year— that of Great Britain, has exceeded Twenty Millions, some years. America may therefore carry on this War, an hundred Years, and at the End of it will be no more in Debt in Proportion to her present5 Numbers of People and her Exports in 17746 than Great Britain is now.

There is another Consideration of some Weight. The Landed Interest in America is vastly greater in Proportion to the mercantile Interest, than it is in Great Britain. The Exports of America are the Productions of the soil, annually, which increase every year. The Exports of Great Britain were Manufactures, which will decrease every Year, while this War with America lasts.

The only Objection to this Reasoning is this, that America, is not used to great Taxes, and the People there are not yet disciplined to such enormous Taxation as in England. This is true. And this makes all their Perplexity at present. But they are capable of bearing as great Taxes in Proportion as the English, and if the English force them to it, by continuing the War, they will reconcile themselves to it: and they are in fact, now taxing themselves more and more every Year, and to an Amount that a Man who knew America only twenty year ago would think incredible.

Her Wants have hitherto been supplied by the Inhabitants themselves, and they have been very little indebted to foreign Nations. But on Account of the Depreciation of her Paper, and in order to introduce a more stable Currency, she has now Occasion to borrow a sum of Money abroad, which would enable her to support her Credit at home, to exert herself more vigorously against the English both by sea and Land, and greatly assist her in extending her Commerce with foreign Nations especially the Dutch. America would not loose of her Strength by borrowing Money, but on the Contrary would gain vastly. It would enable her to exert herself more by Privateering, which is a Mine of Gold to her. She would make Remittances in Bill of Exchange to foreign Merchants for their Commodities, and it would enable Many Persons to follow their true Interest in Cultivating the Land instead of attending to Manufactures, which being indispensable, they are now obliged more or less to follow, tho less profitable. The true Profit of America, is the continual Augmentation of the Price and Value of Land. Improvement in Land, is her principal Employment, her best Policy, and the principal source of her growing Wealth.

The last Question is easily answered. It is. What would be required to act offensively, and by that means, shorten the War?

To this I answer, nothing is wanted, but a Loan of Money, and a Fleet of ships.

A Fleet of ships, only Sufficient to maintain a superiority over the English, would enable the Infant Hercules to Strangle all the Serpents that environ his Cradle. It is impossible to express in too Strong terms, the Importance of a few ships of the Line to the Americans. Two or three French or Dutch or Spanish ships of the Line, Stationed at Rhode Island, Boston, Delaware River, or Chesapeak Bay, would have prevented, the dreadful Sacrifice at Penobscot. Three or four ships of the Line would have prevented the whole Expedition to Charlestown. Three or four ships of the Line more, added to the Squadron of the Chevalier de Ternay, would have enabled the Americans to have taken New York.7

A Loan of Money is now wanted, to give Stability to the Currency of America—to give Vigour to the Inlistments for the Army—to add Alacrity to the fitting out Privateers—and to give an Ample Extension to their Trade.

The Americans, will labour through, without a Fleet and without a Loan. But it is ungenerous and cruel, to put them to such Difficulties, and to keep Mankind embroiled in all the Horrors of War, for Want of such Trifles, which so many of the Powers of Europe wish they had and could so easily furnish. But if Mankind must be embroiled and the Blood of Thousands must be shed, for want of a little Magnanimity in some, the Americans must not be blamed, it is not their Fault.

I have the Honour to be &c,